Russian producers move from city jungles to industrial hubs

Nov 04, 2011 12:00 AM

With Moscow becoming tightly constrained and overloaded with traffic, Russian producers have begun moving from city jungles to industrial hubs on the Moscow outskirts. Technological hubs and Industrial parks are set to stimulate growth in Russia's industrial and manufacturing sectors, increase the share of foreign investments and gain trust in Russian economic stability and prosperity.

The state Association of Industrial Parks aims to establish cooperation among members and foster industrial expansion in all Russian regions opening regional potential for manufacturing and trade. The association was set up by, and brings together some 40 members, who deliver professional services all over Russia, including Moscow, St Petersburg, Ulyanovsk, Kaluga, Ivanovo, Tatarstan, Perm, Orel, Volgograd, Sverdlovsk and Belgorod.

Maxim Ivanov, chairman of the association, says industrial parks create more jobs and more taxes for the local budget, as well as developing the local infrastructure. “Industrial parks have a 'ready to go' infrastructure,” Ivanov says. The association has already launched 25 industrial parks, with 60 to 70 more in the pipeline.

Boris Titov, chairman of the Delovaya Rossiya (Business Russia) association, says there are more than 100 industrial parks in the country, “but 80 to 90 % of them cannot be counted on, because they do not work efficiently and cannot attract investors”. “Most of the hubs were established by the government, without any economic reason,” Titov adds.

The Kaluga region, which attracted $ 1.3 bn in foreign investment from 2006 to 2009, and is one of the country's most successful economically, has seven industrial parks hosting major companies like General Electric, Mitsubishi and Volkswagen. Vladimir Popov, Head of the Kaluga Regional Development Corporation, says industrial parks inspire confidence. “The main idea behind [industrial parks] is the total absence of infrastructure risk. Big companies feel that industrial parks help them to effectively realize their projects in Russia.”

Industrial parks have been significant in the economic development of many other countries, particularly Ireland, Turkey and Spain. At an investment forum in Moscow earlier this year, Francisco Ania, director of the Spanish company Impulso, said that judging from the experience of his country, "the industrial park is the best means for developing the regions of the modern era”.